City & Business: Who fancies a quick thrill with the Abbey?

Click to follow
The Independent Online
Abbey National is presenting itself as the bungee's friend with its opportunistic offer to buy Scottish Amicable. Bungee in this context should be taken to mean a policyholder who receives a bung (in the form of shares or other financial incentives) not the mechanism by which people hurl themselves from great heights only to be pulled up just feet away from instant destruction. Intriguingly, the Abbey National offer presents potential Scottish Amicable bungees with the conundrum of the bungee jumper. The key to a successful bungee jump is not what happens at the beginning but what happens at the end. I am sure that while you are standing at the top of a tall building with only a length of rubber between you and certain death the words of encouragement, exhortations to jump and promises of great personal enrichment are extremely reassuring. I am equally sure that if the rubber breaks, or is just a few feet longer than you thought, then it is far too late to do anything about it.

So it is with Abbey National. It is attempting to stand alongside policyholders at the top of the building and encourage them to take the bung and take the plunge. The problem for policyholders is that it is what happens at the end of the policy that is of vital importance. The soothing words and promises of personal enrichment today mean nothing if in 20 years' time the policy does not realise its full potential. But like the bungee jump, by then it is too late to do anything about it.

The message for Scottish Amicable policyholders is that they should continue to focus on the long term rather than the short term. The board currently has its own plans to demutualise and ultimately float the company. These plans can only be assessed with a long-term view. Policyholders must take a similar attitude to the Abbey National offer should it ever be formalised.

Scottish Amicable will be sending its circular to policyholders in the next few days. That will be the first opportunity for policyholders to see for themselves the full details of the board's proposals. It will also give Abbey National a similar opportunity. Perhaps then the bungee's friend will have the information it needs to make the more considered proposal that policyholders need before they can even begin to reach a conclusion.

Pie in the BSkyB

The market responded enthusiastically to the formation of British Digital Broadcasting and its application to dominate the digitalisation of terrestrial TV. BDB's member companies, Carlton, Granada and BSkyB, all registered sharp gains on Friday as investors drooled over this grand collaboration. They had presumably taken at face value the claim by Michael Green, BDB's chairman, that going digital is the most important development for British Television since the introduction of colour. Personally, I think the invention of the remote control is more important. The video recorder is also up there, as is EastEnders. But then I am not charged with the responsibility of persuading the nation to hand over large amounts of money to watch a bunch of repeats and the best of BSkyB.

No doubt the BDB consortium will be offended by such a dismissive view of its thoughtfully crafted package. But then I do not believe this country has any need for 30 additional TV channels. We do not have the content to satisfy the existing channels so why bother with any more? My theory is that if we have enough channels it will take so long to read through the listings that by the time we discover that there is nothing worth watching it will be way past bed time.

The BDB proposal is premised on the notion that we as a nation want to watch more TV rather than better TV. Not necessarily true. If BDB is to have a future then it needs to have a more imaginative view of digital television's position in the leisure market than the company has been prepared to articulate so far. The convergence of computers and television, the importance of on-demand programming and changing leisure priorities have been quietly left on one side.

Even within the confines of BDB's blinkered view of the future it is hard to see why it should succeed. As the company points out so eloquently, only 25 per cent of the country has availed itself of the chance to pay up for satellite and cable TV. There is no particular reason why many more will sign up. Unless of course BDB is to provide the cover for BSkyB to tighten its grip on the British sporting scene. It may not be able to snare Wimbledon with its satellite hat on but, as a supplier to digital TV, BSkyB would have a more powerful argument.

There is little doubt that BSkyB has the most to gain simply because it had the most to lose from digital terrestrial. It has secured a powerful seat at the digital terrestrial table. Even if BDB is a disaster, BSkyB will be safe in the knowledge that at least no one else can be a success.

Nothing to worry about

BZW is having a hard time of things lately. Late last year it was at the heart of a takeover controversy that ultimately cost its client, Northern Electric, its independence. Last week it was blamed by its client, Premier Farnell, for a profits warning which knocked nearly a quarter of the value off the company. The two incidents are unrelated and in both cases BZW behaved entirely honourably. However, there is just a sense that the firm has lost some of its old confidence. In both situations BZW demonstrated uncertainty and hesitance - attributes that are not normally associated with the firm.

There have been many changes at the firm since the arrival of Bill Harrison and, on top of that, a move from the City to Canary Wharf in London's docklands looms. These are no doubt unsettling times, which can impact on performance. Not so at BZW. I am reassured that all is well. The mandates continue to roll in and spirits are high. That is good news for clients who will be relieved that bad news does not, in BZW's case, come in threes.

Comments